Is Roku Stock A Good Investment? – (ROKU)
Wednesday saw Roku stock hit a record high after news of the streaming platform releasing new set-top boxes became public. The new box-sets from Roku will be coming in time for Christmas. This is great timing for the Roku box-sets to release because it means that it will receive a sales boost from X-Mas shoppers.
Monday saw Roku announce its streaming-player collection with two new devices. The Roku Premiere costs $39.99 and allows people to stream high defenition video in 4K Ultra HD and 4K HDR. The Roku Premiere Plus will cost $49.99 and has voice control capabilities. October will see these devices come available.
These new products from Roku are likely to improve the company’s financial standings in the long-term. For Roku stock price, these new devices could prove to be a driving force for new investors to invest.
Roku stock price has jumped 41.1% year to date, the tech industry has increased by 31.6%. Meaning that Roku has outperformed the industry.
Roku Stock Prediction
This summer, Roku has been topping analyst estimates with ease. In only a few months, ROKU stock has gained over 50%. In the past we have seen investors more cautious when investing in ROKU stock, causing historically low gains.
Q2 2018, ROKU generated revenues of $157 million, which easily surpasses analyst estimates of $141 million. By moving into advertising, ROKU seems to be reaping the rewards of the decision. Since last earnings report, ROKU has been topping investor charts. Although, some investors expect tough times in ROKU’s future..
The trouble that the company may face in the future comes from competition from Amazon. Last month, Amazon announced that it would be launching its own free streaming service for the Amazon Fire device. This device from Amazon will be a direct rival for Roku’s device.
Amazon will be adding NFL games and may even be integrating Twitch to its upcoming streaming service. Along with Amazon’s already-vast content base, the streaming service will become a streaming monolith.. making some investors wonder if Roku stands a chance.
Bull investors are stating that The Roku Channel offers a unique experience, whilst bearish traders are citing over-saturation in the streaming service market.
For consumers, there will be tens of streaming services to choose from, making it harder for Roku to gain a significant market-share. In the long-term, companies like Netflix and Disney have resources and funds to ensure the streaming landscape is limited in terms of competition.
If Roku can successfully identify a niche in the streaming market that they can dominate, investors will be more attracted to the company. As with many tech companies, Roku stock carries a significant risk factor.
There are too many unknown factors surrounding Roku as a company to give it a “BUY” rating. This past quarter Roku broke even, ahead of analysts time-estimates. User hours increased, with streaming hours up by a huge 57%. User count also grew, by 46%. These are promising metrics for any investor.
For the quarter, Roku profits are set to see a 98.4% increase year-over-year.
Roku stock price estimate for the next year sees highs of $81 and lows of $44.00.
I give Roku stock a “HOLD” rating currently.